Write-down bulk of Tribune loss
Tribune Co., publisher of the Los Angeles Times, reported a second-quarter net loss of $4.53 billion after writing down the value of its publications.
The loss compared with a profit of $36.3 million a year earlier and included a $3.83-billion expense to reflect the falling value of its newspapers, the Chicago-based company said. Sales fell 5.7% to $1.11 billion. Newspaper advertising sales tumbled 15%, Tribune said.
The worsening advertising slump has made it harder for investor Sam Zell, who took Tribune private in December, to manage $12.5 billion in debt after the buyout. Zell has eliminated jobs and trimmed pages to cut costs, sold Newsday in New York and is seeking a buyer for the Chicago Cubs baseball team. The company said in June that it was exploring options for its downtown buildings in Los Angeles and Chicago.
Zell said Tribune had repaid $807 million in debt using proceeds from the sale of commercial paper and Newsday. The company has a principal balance of $593 million due in June 2009, he said.
The company said the write-down was primarily from Tribune’s $7.5-billion purchase in 2000 of Times Mirror Co., then publisher of The Times. The company also reported a loss of $693 million on the sale of Newsday to Cablevision Systems Corp., even after receiving $630 million from the transaction.
Operating profit before the write-downs fell 3.8% to $168.5 million from $175.1 million a year earlier. Operating cash flow dropped 2.5% to $220.7 million.
“Since the beginning of the year, we have launched dozens of programs and products that have the potential to make a meaningful impact on our future, and we have made significant progress in aligning our expenses with the realities of an industry in recession,” Zell said.